FMA takes on rare insider trading prosecution over Pushpay shares sale

New Zealand’s financial markets watchdog has accused two people of insider trading over the sale of shares in the NZX and ASX-listed Pushpay.

The Financial Markets Authority (FMA) today said it has filed proceedings against two individuals, who have both been granted interim name suppression until the first court appearance.

One of the people faces a criminal charge, filed in the Auckland District Court, and both face civil proceedings, filed in the High Court at Auckland.

Pushpay, a donor management system for charities operating in the US, announced co-founder and director Eliot Crowther had resigned and sold down his shareholding in the firm in June 2018.

The FMA alleges one of the accused “used this material inside information to advise or encourage another person to trade in the lead up to the market announcement”, while the other person was involved in the conduct.

Crowther’s trading was legitimate and he is not a party to the proceedings, the FMA said.

The matter was referred to the FMA by NZX Regulation, the frontline regulator of NZX, in July 2018.

The FMA added Pushpay has cooperated and has not been the subject of its investigation nor is a party to any proceeding.

Insider trading cases in New Zealand are rare and in 2018 the first insider trading trial in New Zealand’s legal history ended in a former executive of transport and technology company Eroad being found not guilty.

Hamish Sansom was charged by the FMA after selling 15,000 Eroad shares for about $50,000 just days before its stock price plummeted.

He sold his shares just two days after he received texts from Eroad’s former insights and analytics manager Jeffrey Peter Honey.

Honey, who was hired at Eroad by Sansom after the pair grew friendly while working at Vodafone, was convicted and sentenced to six months’ home detention for his part in the scandal in 2017.

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